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Virgin Australia Orders 23 Boeing 737 MAX8 Planes

Australian budget carrier Virgin said Thursday it had ordered 23 of Boeing's new fuel-efficient 737 MAX8 passenger jets to replace the ageing 737-700 portion of its fleet.

Virgin, Australia's second-biggest airline after Qantas, said the new planes would join its fleet between 2019 and 2021 under a deal with Boeing (IW 500/15) including four additional delivery options depending on market conditions.

The 737 MAX8 is 30% more fuel efficient than similar-sized aircraft launched three decades ago, such as Boeing's 737-300 -- a major plus for airlines suffering from the high cost of fuel.

Virgin expects all of its 737-700s, first rolled out in 1996, to be retired by the end of 2013 and CEO John Borghetti said the MAX -- a rival to the Airbus (IW 1000/56) A320neo -- would continue the airline's affiliation with Boeing.

"One of the key advantages of the Boeing 737 MAX is that it should reduce fuel burn and CO2 emissions by 13 per cent over today's most fuel-efficient single-aisle aircraft," Borghetti said in a statement to the Australian Stock Exchange.

Virgin said it had delayed delivery of a separate next-generation 737 order until after 2016 as part of the deal, "leaving 31 scheduled deliveries of Boeing 737-800 aircraft between 2013 and 2016."

"Virgin Australia will continue to review its fleet strategy to ensure we align fit-for-purpose aircraft to markets and maintain maximum flexibility in capacity management," Borghetti added.

Virgin announced a collaboration on eucalyptus-based biofuels with Boeing rival Airbus back in March -- see story.

Qantas ordered 78 A320neos last year, citing the cost efficiencies of burning less fuel, particularly across moderate distances like Sydney to Indonesia's Bali or Kuala Lumpur and Singapore to Australia's east coast.